October 04, 2024 05:53 AM
The EU and China will continue to seek alternate means to resolve the trade dispute, which has divided EU members.
BLOOMBERG
BYD models in a showroom in Paris. Chinese automakers such as BYD face total tariffs of up to 45 percent.
BRUSSELS — The European Commission’s proposal to impose definitive tariffs on Chinese-made electric vehicles has obtained the necessary support from member states in a vote Oct. 4, the commission said in a statement.
The commission added it would continue negotiations with China in parallel “to explore an alternative solution that would have to be fully WTO-compatible, adequate in addressing the injurious subsidization established by the Commission’s investigation, monitorable and enforceable.”
A final regulation must be entered into the official record by Oct. 30, the commission said.
The commission, the EU’s executive arm, can now proceed with implementing the duties, which would last for five years. Ten member states voted in favor of the measure, while Germany and four others voted against and 12 abstained, according to people familiar with the process who spoke on condition of anonymity.
The decision by the EU comes after an investigation found that China unfairly subsidized its industry. Beijing denies that claim and has threatened its own tariffs on European dairy, brandy, pork and automobile sectors.
The bloc is actively trying to reduce its dependencies on China, with former European Central Bank President Mario Draghi warning last month that “China’s state-sponsored competition” was a threat to the EU that could leave it vulnerable to coercion. The EU, which did €739 billion ($815 billion) in trade with China last year, was split on whether to move forward with the duties.
The commission has repeatedly said that any alternative to tariffs – such as minimum pricing — has to have strict requirements, including alignment with World Trade Organization rules, addressing the impact of China’s subsidies and the ability to be monitored by the EU for compliance.
The new tariff rates will be as high as 35 percent for EV manufacturers exporting from China. The new duties would be on top of the existing 10 percent rate.
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